Breaking Up Banks by Harish Thakkar

January 15, 2013

In this article we provide you with the expert comment of Mr.Harish Thakkar , Chief Faculty at Imarticus Learning on the following article posted by Bloomberg. Do you actually think you can make more profit than you Bank? Let’s see what the experts say:

“The first and most obvious proof that we can lies in the 2010 bank-regulation law, the Dodd-Frank Act, which requires America’s too-big-to-fail banks to submit plans — so-called living wills — outlining how they can be dismantled if they get into trouble. So these banks have already provided breakup blueprints.”

Here’s what Mr Thakkar has to say:

“The premise of the Dodd-Frank Act is to plan the breaking up the “Big Banks” once they get into trouble. It may just be too late then to do so as the crisis of a Big Bank failing would engulf the entire global market. The trading business would be difficult to hive-off and may not have takers. Lessons learnt from Lehman failure, Big Banks could rather look at separating their stand alone businesses and insulating the others. Regulators may want to take cues from the Glass-Stealgate Act here and come up with something preemptive.”